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TORONTO , Oct. 9, 2014 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") – (ANX.TO) is pleased to report its financial and operating results for the three months ended August 31 , 2014. The Company generated earnings before interest, taxes, depreciation and amortization and stock based compensation ("EBITDA") of $865,172 . The Company sold 3,933 ounces of gold resulting in $5,511,612 in revenue at an average sales price of $1,401 per ounce. Cash cost per ounce sold at the Pine Cove Project was $1,131 . Net loss for the three months ended August 31, 2014 was $175,810 . As at August 31, 2014 , the Company had cash and cash equivalents of $2,208,969 and net working capital of $5,223,570 compared to $2,754,225 and $5,066,477 respectively at May 31, 2013 .
President and CEO, Dustin Angelo , stated, "In the first quarter, the Company was focused on long term development of the Pine Cove Project. We spent nearly $800,000 or $200 per ounce on capital expenditures and exploration. We made great progress on our tailings facility expansion, completed over 2,000 meters of drilling at Deer Cove and started planning our program at Sto'ger Tight. Operationally, the Company got off to a good start for the fiscal year, generated positive cash flow and had a healthy cash balance at the end of the quarter."
Highlights for the three months ended August 31 , 2014
OPERATING PERFORMANCE:
- As at August 31, 2014 , the Company had cash and cash equivalents of $2,208,969 and net working capital of $5,223,570 .
- For the three months ended August 31, 2014 , the Company sold 3,933 ounces of gold and generated $5,511,612 in revenue at an average sales price of $1,401 per ounce.
- The mill processed 963 tonnes per operating day for the three months ended August 31, 2014 .
- The overall recovery in the mill for the three months ended August 31, 2014 was 84%.
- Cash cost per ounce sold at the Pine Cove Project for the three months ended August 31, 2014 was $1,131 per ounce.
- All-in sustaining cash cost per ounce sold ("AISC"), including corporate administration, capital expenditures and exploration costs for the three months ended August 31, 2014 was $1,457 per ounce.
- Revenue from the Chilean iron ore properties was $305,452 for the three months ended August 31, 2014 including royalty income of $260,952 .
- At the Pine Cove Project, EBITDA (see Reconciliation of Non-GAAP Financial Measures) for the three months ended August 31, 2014 was $1,064,216 .
- On a consolidated basis, EBITDA for the three months ended August 31, 2014 was $865,172 .
- Net loss for the three months ended August 31, 2014 was $175,810 .
- Purchase of property, mill and equipment for the three months ended August 31, 2014 was $355,419 . Key items included tailing expansion costs of $196,000 , waste dump development of $60,000 , survey equipment of $38,000 and in-pit construction of $22,000 .
- Additions to production stripping assets for the three months ended August 31, 2014 were $143,038 .
GROWTH INITIATIVES:
- Approximately $422,000 was spent at the Pine Cove Project on exploration for the three months ended August 31, 2014 . The Company's exploration initiatives for the three months ended August 31, 2014 focused on a continued drill program on the Deer Cove deposit and preparing for a drill program on the Stog'er Tight deposit.
Operations overview
During the three months ended August 31, 2014 , the gold sales volume of 3,933 ounces represented a 4% decrease over the same period in fiscal 2014 largely due to a change in ore grade from 1.92 grams per tonne ("gpt") for the three months ended August 31, 2013 to 1.80 gpt for the three months ended August 31, 2014 . Average sales price for the three months ended August 31, 2014 was $1,401 per ounce versus $1,399 per ounce for the same period in fiscal 2014. As a result of the lower sales volume, gross revenue for the three months ended August 31, 2014 of $5,511,612 was lower than the same period of fiscal 2014 by $220,171 or 4%.
The following table summarizes the key operating metrics for the three months ended August 31, 2014 and 2013:
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OPERATING STATISTICS:
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August 31
2014
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August 31
2013
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Mill
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Operating days
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87
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85
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Availability
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95%
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93%
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Dry tonnes processed
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83,782
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83,890
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Tonnes per 24-hour period
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963
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987
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Grade (grams per tonne)
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1.80
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1.92
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Overall mill recovery
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84%
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83%
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Gold sales volume (troy oz.)
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3,933
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4,096
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Mine
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|
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Operating days
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64
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64
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Ore production (tonnes)
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89,239
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74,189
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Waste production (tonnes)
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492,040
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484,514
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Total production (tonnes)
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581,279
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558,703
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Waste: Ore ratio
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5.5
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6.5
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MILLING OPERATIONSThe Pine Cove mill operated for 87 days during the three months ended August 31, 2014 at 95% availability (93% for the same period in fiscal 2014). The mill processed 963 tonnes per operating day at a head grade of 1.80 gpt for the three months ended August 31, 2014 . The mill processed 83,782 dry tonnes of ore for the three months ended August 31, 2014 (83,890 tonnes for the same period in fiscal 2014). The Pine Cove mill overall recovery for the three months ended August 31, 2014 increased to 84% compared to recovery of 83% in the same period in fiscal 2014 due to mill improvements.
MINING OPERATIONSMining activities operated for a total of 64 days during the three months ended August 31, 2014 and excavated a total of 581,279 tonnes of ore and waste during the three months ended August 31, 2014 . Ore production totaled 89,239 tonnes, while waste was 492,040 tonnes for a strip ratio of 5.5:1. Waste production increased to supply material for the expansion of the tailings storage facility.
EXPLORATIONThe Company developed a strategy to leverage the existing infrastructure at Pine Cove. It involves the exploration and development of its mineral and mining leases based on two general mineralization styles within the property: Pine Cove like, quartz-carbonate-pyrite hosted (2+ gpt) mineralization and higher grade (5+ gpt) quartz vein ± carbonate ± pyrite mineralization. The strategy involves delineating more Pine Cove like ore through the expansion of the current Pine Cove resource, delineation and expansion of the Stog'er Tight deposit and the discovery of similar deposits, while also delineating higher-grade deposits such as Deer Cove and Romeo and Juliet and discovery of similar style deposits to incrementally increase the feed grade for the mill.
Consistent with this strategy, in the three months ended August 31, 2014 , Anaconda made the following advances in exploration:
- Continued a drill program on the Deer Cove deposit.
- Prepared for a drill program on the Stog'er Tight deposit.
Deer CoveExploration activities for the three months ended August 31, 2014 included the continuation of a Diamond drill program on the Deer Cove deposit, assemblage of historical data, geological mapping, core cutting and analysis, and initial work on the resource model. These activities were coordinated to achieve the goal of preparing an internal resource estimate to be used in assessing the next stage of exploration and/or development.
Sto'ger TightExploration activities included developing an exploration plan by determining the accurate position of historical drill collars and trenches for the Stog'er Tight deposit and assessing the historical exploration data. These activities provided the basis for the commencement of a 2,000 meter drill program that began in September, all with the goal of preparing an internal resource estimate to be used in assessing the next stage of exploration and/or development.
The information in this MD&A has been reviewed and approved by Paul McNeill , P. Geo., VP Exploration, a "Qualified Person" under National Instrument 43-101.
Reconciliation of Non-GAAP Financial Measures
The Company has included certain non-GAAP financial measures in this document. These measures are not defined under IFRS and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not necessarily standard and therefore may not be comparable to other issuers.
EBITDA is earnings before finance expense, foreign exchange loss (gain), unrealized gain on forward sales contract derivative, share based payments, income tax recovery and depreciation and depletion.
The following table provides a reconciliation of EBITDA for the three months ended August 31, 2014 and 2013:
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For the three months ended
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August 31
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August 31
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2014
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2013
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$
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$
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Net income (loss)
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(175,810)
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596,296
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Add back:
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Finance expense
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336
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192
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Foreign exchange loss (gain)
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(9,884)
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370
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Unrealized loss (gain) on forward sales contract derivative
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(15,222)
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62,239
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Share-based payments
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48,119
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68,070
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Income tax expense (recovery)
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(63,000)
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244,000
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Depletion and depreciation
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1,080,633
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815,185
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EBITDA
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865,172
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1,786,352
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Cash cost per ounce sold is cost of sales before depreciation divided by gold ounces sold. All-in sustaining cash cost per ounce sold is cash cost, corporate administration, purchase of property, mill and equipment and purchase of exploration and evaluation assets divided by gold ounces sold.
The following table provides a reconciliation of cash cost per ounce sold and all-in sustaining cash cost per ounce sold for the three months ended August 31, 2014 and 2013:
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For the three months ended
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August 31
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August
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2014
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2013
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Cost of sales
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5,528,029
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4,269,267
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Less: Depletion and depreciation
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(1,080,633)
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(815,185)
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Cash operating cost
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4,447,396
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3,454,082
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Corporate administration
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504,496
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491,349
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Purchase of property, mill and equipment
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355,419
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403,060
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Purchase of exploration and evaluation assets
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422,031
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478,643
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All-in cash cost
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5,729,342
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4,827,134
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Gold ounces sold
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3,933
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4,096
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Cash cost per ounce sold
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1,131
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843
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All-in sustaining cash cost per ounce sold
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1,457
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1,178
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ABOUT ANACONDA
Headquartered in Toronto, Canada , Anaconda is a growth oriented, gold mining and exploration company with a producing asset located on the Baie Verte Peninsula in Newfoundland, Canada called the Pine Cove mine.
FORWARD LOOKING STATEMENTS
This document contains or refers to forward-looking information. Such forward-looking information includes, among other things, statements regarding targets, estimates and/or assumptions in respect of future production, mine development costs, unit costs, capital costs, timing of commencement of operations and future economic, market and other conditions, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to: the final approval of the private placement by the Toronto Stock Exchange; the grade and recovery of ore which is mined varying from estimates; capital and operating costs varying significantly from estimates; inflation; changes in exchange rates; fluctuations in commodity prices; delays in the development of the any project caused by unavailability of equipment, labour or supplies, climatic conditions or otherwise; termination or revision of any debt financing; failure to raise additional funds required to finance the completion of a project; and other factors. Additionally, forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "plans," "may," "estimates," "expects," "indicates," "targeting," "potential" and similar expressions. These forward-looking statements, including statements regarding Anaconda's beliefs in the potential mineralization, are based on current expectations and entail various risks and uncertainties. Forward-looking statements are subject to significant risks and uncertainties and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no responsibility to update them or revise them to reflect new events or circumstances, except as required by law.
SOURCE Anaconda Mining Inc.
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